On January 31, 2017, the FCA published a final notice issued to
Deutsche Bank AG and fined the bank £163 million for failing
to maintain an adequate AML control framework between January 1,
2012 and December 31, 2015. Deutsche Bank notified the FCA in early
2015 of concerns about its AML control framework after the bank had
begun an investigation into suspicious securities trading, known as
"mirror trading." The orders for both sides of the mirror
trades were received and executed by Deutsche Bank's Moscow
office. The Moscow office executed the trades on behalf of Deutsche
Bank via remote booking by directly booking trades to Deutsche
Bank's trading books in the UK. The FCA's investigation
revealed that the mirror trading was able to be executed by
Deutsche Bank's Moscow office because of the widespread
deficiencies in the bank's AML control framework, in
particular, the bank performed inadequate customer due diligence,
failed to ensure that its front office took responsibility for
it's Know Your Customer obligations, used flawed customer and
country risk rating methodologies, had deficient AML policies and
procedures, had an inadequate AML IT infrastructure, lacked
automated AML systems for detecting suspicious trades and failed to
provide adequate oversight of trades booked in the UK by traders in
The FCA noted that the scale, volume and the way the trades were
conducted were "highly suggestive" of financial crime.
Deutsche Bank was used by unidentified customers to transfer
approximately $10 billion, of unknown origin, from Russia to
offshore bank accounts. As a result, the bank had put itself and
the UK financial system at risk. However, the regulator considered
that the failings in the AML framework had not been committed
deliberately or recklessly and there was no evidence that any of
the senior management or employees of Deutsche Bank in London had
been aware of or involved in the suspicious trading.
The fine is made up of a disgorgement of around £9 million
and a penalty of £154 million. Deutsche Bank has undertaken
to cooperate with any other regulator or enforcement agency that is
investigating or commences an investigation into the matter.
The implementation of the mandatory exchange of initial and
variation margin for non-cleared OTC derivative trades in the EU
commenced on 4 February for financial counterparties with the
largest derivatives portfolios.
On February 9, 2017, HM Treasury published a paper summarizing responses to its consultation on the transposition of the revised MiFID and three draft statutory instruments to facilitate transposition.
We consider below the circumstances in which a person may hold an "unpaid vendor lien", the effect of such a lien following the Supreme Court case of Menelaou v Bank of Cyprus UK Ltd  EWHC 2656...
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